Balancing Growth and Green Goals: Pathways for Ghana’s Sustainable Economic Transformation

This case study examines the tension between Ghana's economic growth and its environmental and fiscal sustainability, focusing on the energy sector's debt and the ecological damage caused by illegal gold mining (galamsey). It argues that Ghana must transition from a high-carbon, debt-driven energy model and a destructive informal mining sector toward green industrialization and renewable energy to ensure long-term economic transformation.

• Ghana's energy mix has shifted from being predominantly renewable to being dominated by thermal generation, which accounted for nearly two-thirds of electricity output by 2023. This transition has increased annual carbon emissions from approximately 10 million tonnes in 2010 to 19 million tonnes in 2020, with per capita emissions rising from 0.41 tonnes in 2010 to 0.74 tonnes in 2022.
• The energy sector faces severe financial instability due to a mismatch between high generation costs and politically constrained tariffs, leading to massive arrears. Total energy sector debt was estimated between US$3.1 billion and US$3.7 billion by early 2025, with liabilities to independent power producers (IPPs) alone reaching US$1.73 billion in 2024.
• Illegal small-scale gold mining, known as galamsey, accounts for 35 percent of Ghana's total gold production but causes extensive environmental degradation. It poisons drinking water with lead and mercury, drives deforestation, and destroys biodiversity, which in turn threatens the viability of hydropower dams like Akosombo and Kpong.
• The Ghana Gold Board (GoldBod), established by Parliament in 2025 via Act 1140, aims to formalize artisanal mining and curb smuggling through a digital licensing system. However, there are concerns that the entity may inadvertently support illegal mining if buying processes lack transparency or rigorous oversight.
• Ghana's climate finance is significantly insufficient to meet its Nationally Determined Contributions (NDC) under the Paris Agreement. In 2019 and 2020, the annual average of tracked climate finance was US$830 million, representing only 5 percent to 9 percent of the required investment, which is estimated to be between US$9.3 billion and US$15.5 billion.
• To achieve sustainable transformation, the document proposes several pathways: ring-fencing the Energy Levy through an independent trustee, launching competitive solar auctions (10–50 MW), establishing a green investment facility, and exploring geothermal and nuclear energy (specifically pressurized water reactors).

APA

Owusu-Baafi, S. (2026). Balancing Growth and Green Goals: Pathways for Ghana’s Sustainable Economic Transformation. African Center for Economic Transformation. https://acetforafrica.org/research-and-analysis/insights-ideas/case-study/balancing-growth-and-green-goals-pathways-for-ghanas-sustainable-economic-transformation/

Chicago

Owusu-Baafi, Samuel. Balancing Growth and Green Goals: Pathways for Ghana’s Sustainable Economic Transformation. African Center for Economic Transformation, 2026. https://acetforafrica.org/research-and-analysis/insights-ideas/case-study/balancing-growth-and-green-goals-pathways-for-ghanas-sustainable-economic-transformation/.

Wikipedia

{{cite report |last1=Owusu-Baafi |first1=Samuel |title=Balancing Growth and Green Goals: Pathways for Ghana’s Sustainable Economic Transformation |publisher=African Center for Economic Transformation |date=9 April 2026 |url=https://acetforafrica.org/research-and-analysis/insights-ideas/case-study/balancing-growth-and-green-goals-pathways-for-ghanas-sustainable-economic-transformation/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{owusubaafi2026balancing, author = {Owusu-Baafi, Samuel}, title = {{Balancing Growth and Green Goals: Pathways for Ghana’s Sustainable Economic Transformation}}, institution = {African Center for Economic Transformation}, year = {2026}, month = apr, url = {https://acetforafrica.org/research-and-analysis/insights-ideas/case-study/balancing-growth-and-green-goals-pathways-for-ghanas-sustainable-economic-transformation/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }